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Breaking Ground in Back Bay

The following blog post was submitted by Sheridan Wachtel, Marketing Assistant at Solomon McCown.

On May 31, experts from all sides of the real estate industry joined us at the Sheraton Hotel to discuss one of Boston’s most iconic and sought-after neighborhoods, the Back Bay. The program, “Breaking Ground in Back Bay,” discussed the future opportunities for retail, residential, office and hotel in the neighborhood that has been the epicenter of the city for decades.

Jammen, one of the architects of the Newbury Line Program, discussed the “red hot” retail scene in the Back Bay and more specifically, Newbury Street. “Constrained by being only eight blocks in length, retail real estate on Newbury street is seeing more demand than supply,” said Jammen in light of the fact that the street’s architecture isn’t traditionally window-display friendly. “It doesn’t have the windows like Rodeo Drive and other luxury retail streets of the world…but no one is going to build another Newbury street anytime soon,” said Jammen.

Having represented some of Boston’s most notable office spaces including The Hancock Tower, Marteldiscussed the increasing value of Back Bay’s office properties. “We have seen a quantum shift in office space demand in the Back Bay since 2008,” said Martel explaining how the coveted 24/7 lifestyle of the neighborhood is an increasingly important factor to office tenants to attract and retain talent—a factor that sets it apart from both contemporary urban areas like the Seaport and traditional office space properties like the Financial District and suburban areas.

With a growing desire to work in the Back Bay, residential real estate in the area has only increased in value. Roberts commented on the demographic shift that has made residential real estate in the Back Bay boom. “Young professionals landing a majority of newly created jobs, along with empty nesters wishing to return to city-livingare the key demographics in residential real estate in this area,” said Roberts.

And, according to Roberts, residents of the Back Bay aren’t planning to move out of the Back Bay anytime soon, citing residential properties in the neighborhood see half the turnover rate than all other neighborhoods in their portfolio.

Rounding out the panel was long-time hotelier Saunders, who discussed the resiliency of hotel occupancy in Boston’s Back Bay despite the influx of new hotels in Boston’s Seaport district. “Back Bay continues to be ground zero for people who want to visit the city,” said Saunders whose hotels operate at 90+ percent occupancy rate in the summer months and projecting 2012 to yield its highest occupancy rates in recent years.

With a full spectrum of real estate development projects underway and even more projected in 2013 and 2014, real estate in the Back Bay will continue to be hot commodity and a place where residents, tenants, tourists and developers want to be.

About Reesa Fischer

Reesa is SVP for NAIOP Massachusetts, where she is focused on maximizing value for members through exceptional programming, education, networking, and special events. NAIOP is the leading voice for commercial real estate in Massachusetts, representing developers, owners, managers, and investors, as well as those who provide services to the industry.